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TMI Blog1989 (3) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative that the relief granted by the CIT(A) is without any justification. Adverting to the amendment made by the Finance Act, 1980 w.e.f. 1/4/1981, it is pointed out that several of the sub-clauses of sec. 35B(1)(b) have been deleted and those that survived did not enable the assessee to claim the relief as was ordered by the CIT(A). The claim has been processed by the CIT(A) under clause (iv) of sec. 35B(1)(b). This clause speaks of maintenance of an agency outside India for promotion of sale outside India of goods, services or facilities. Where the agreement under which commission has been paid contemplates payment for procurement of orders, this cannot be construed as maintenance of an agency outside India and, therefore, it was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITD 631 (Mad.) (TM) and G & Co. v. ITO [1983] 3 ITD 566 (Bom.) (SB). 4. We have heard the parties to the dispute and in our opinion the claim of the assessee is unexceptionable. The decision of the Bombay High Court in Godrej & Boyce Mfg. Co. (P.) Ltd.'s case and the other three decisions of the Tribunal relied upon by the assessee support the case of the assessee. The payment, having regard to the terms of the agency agreement which has been approved by the R.B.I., is not a payment simpliciter for procurement of orders. The agents were required to undertake several other functions to publicise and popularise the products manufactured by the assessee company. In that sense we are of the view that these payments could squarely be covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In such circumstances it would not be proper to hold that outlay for setting up of a new unit has come out of own resources to the entire inclusion of borrowed funds. It was for this reason the IAC, was constrained to take a view that the unit had come up only with the borrowed funds and that there was an abnormal increase in the borrowings of the assessee, cannot be regarded as accidental. The same could be explained only because of the outlay by the assessee in the new unit. As regards the other unit, it is submitted by the learned Departmental Representative that the matter has been discussed at length by the IAC in the order for the year 1979-80. When the unit was first set up in that year, the I.A.C. had held that the assessee would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta High Court in Woolcombers of India Ltd. v. CIT [1982] 134 ITR 219, it is submitted that similar view taken by the revenue did not find favour with the Court. That was a case where the assessee had paid advance tax out of funds comprising of assessee's business profits and borrowings. The Court held that since the profits were sufficient to meet the advance-tax liability, it should be presumed that in its essence and true character the taxes were paid out of the profits of the relevant year and not out of the overdraft account. Similar is the view taken by the same High Court in the case of CIT v. Askoka Charity Trust [1982] 135 ITR 556. Our attention was further invited to the decision of the Andhra Pradesh High Court reported in CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the view that the CIT(A)'s order on the facts available on record cannot be disturbed. We are dealing with the provisions of the Statute which grants concession to an assessee and as has been held by the Supreme Court in the case of Chandulal Harjiwandas v. CIT [1967] 63 ITR 627, the provisions for exemption or relief should be so construed as to effectuate the object of the Legislature and not to defeat it. This view has been reiterated by the Gujarat High Court in CIT v. Satellite Engg. Ltd. [1978] 113 ITR 208. The provisions of sec. 80J are incentive provisions and are intended to give impetus to industrial activity. Such provisions, therefore, have to be construed liberally. That does not mean that tax authorities have to accept an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case therefore becomes stronger in view of the Gujarat High Court judgment in the cage of Saurashtra Cement & Chemicals Industries Ltd. v. CIT [1980] 123 ITR 669. It was held by the High Court that where relief under section 80J has been allowed in the initial year, the I.T.O. cannot examine the question again without disturbing the relief granted in the initial year. Unless the relief granted for the earlier year is disturbed or changed on valid grounds, there cannot be valid grounds for withholding or withdrawing the relief which has been already granted once. The IAC (Assessment) is, therefore, directed to allow relief under section 80J in respect of the Liquid Injection Plant also." The findings of the CIT(A) are clear cut and unambi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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